In a major development, the Competition Commission of India (CCI) has reportedly found e-commerce giants Amazon and Walmart-backed Flipkart guilty of violating competition laws by favouring select sellers on their shopping websites, according to a Reuters report.
In a 1027-page report on Amazon and a separate 1,696-page report on Flipkart, both dated August 9, CCI investigators found that the companies boosted preferred sellers in search results, elbowing out other sellers.
"Each of the anti-competitive practices alleged..were investigated and found to be true," according to both reports seen by Reuters.
In 2020, the antitrust watchdog the CCI ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers they had business deals with and prioritising certain listings.
Both Flipkart and Amazon have previously denied wrongdoing and said their practices are in line with Indian laws. The report further revealed that both e-commerce giants will review the report and file any objections before CCI staff decide on any potential fines.
The case was filed by a complaint from the Delhi Vyapar Mahasangh, a group linked to the Confederation of All India Traders (CAIT), the largest trade organisation in the country with almost 80 million retailers.
Delhi Vyapar Mahasangh, in 2020, alleged that the e-commerce platform Amazon preferred certain sellers over others. The investigation is also looking into whether the companies' discounting practices harmed overall competition. Both Amazon and e-commerce giant Flipkart are under scrutiny.
"The investigation's findings are the latest setback for Amazon and Flipkart in a country where they continue to face criticism for their business practices from smaller retailers, who say their businesses have suffered in recent years due to deep discounts offered online," Reuters reported.
Amazon and Flipkart are major players in India's e-retail market, which was valued at $57-60 billion in 2023 and is expected to exceed $160 billion by 2028, according to Bain & Company.
(With inputs from Reuters)